Thor Industries stock surged Tuesday after the RV manufacturer reported better-than expected profits and revenue in its fiscal third quarter. However, Airstream-maker warned the current economic environment is taking its toll on business.
The company, which has its headquarters in Elkhart, Ind., sells both towable and motorhome-type RVs. It owns the brand names Airstream, Heartland RV, Jayco and Livin Lite RV.
RV sales had already trended higher for a decade when the coronavirus pandemic supercharged consumer interest. Americans, cautious of traveling in airplanes, packed into RVs and motor homes. However, U.S. RV enthusiasm appears to be waning amid economic turbulence and high interest rates.
Industrywide, there were a total of 31,216 RV shipments in April, a decrease of 45.4% compared to the 57,192 units shipped in April 2022, according to the most recent numbers from the RV Industry Association. The industry association also reports that between January and April, RV shipments were down 52.1% compared to the same point last year.
THO spiked 17.7% to 93.13 Tuesday during market trade. Ahead of Tuesday's action, Thor stock was trading about 5% above where it ended 2022, but had shed 25% since hitting highs of 105.36 on Feb. 2.
Thor Stock: Earnings
Estimates: Wall Street analysts predicted Q3 EPS to drop 83% to $1.07. They set the sales target at $2.81 billion, a 40% decline.
Results: Thor Industries reported third-quarter earnings falling 65% to $2.24 per share. Revenue dropped 37% to $2.93 billion.
CEO Bob Martin said in a statement Tuesday said "market conditions continue to be challenging as dealers and consumers face increasing pressures from the macro environment." Martin added the company's current financials are also being compared to record results last year.
In Thor Industries' 2022 fiscal year, earnings exploded 74% to $20.59 per share while sales shot up 32% to $16.31 billion.
"While we are encouraged by our fiscal third quarter results, we anticipate certain macroeconomic challenges to persist in the near-term," Martin said.
The bright spot was RV sales in Europe, which rose 19.7% to $866.8 million. Meanwhile, North American sales dropped 24.4% to $795.9 million.
Thor Industries expects full-year sales between $10.5 billion-$11 billion, down from the previous guidance of $10.5 billion-$11.5 billion. The company predicts gross profit margin in the range of 13.8%-14.2%. THO's previous outlook was for gross profit margin around 13.4%-14.2% in 2023.
Thor Industries also revised its full-year profits. The company forecasts diluted EPS of $5.80-$6.50, slightly up from an earlier view of $5.50-$6.50.
Thor stock has a 42 Composite Rating out of 99. THO has a 39 Relative Strength Rating. The EPS Rating for Thor stock is 46 out of 99.
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